25 April 2022

Agronomics Limited

("Agronomics" or the "Company")

Performance Shares issued to Shellbay Investments Limited

Directors' Dealings

Further to the publication by Agronomics Limited (the "Company") of its annual results for the financial year to 30 June 2021 on 16 December 2021 (the "Results"), the Company has resolved to issue 30,492,206 new ordinary shares of the Company ("Fee Shares") to Shellbay Investments Limited ("Shellbay") in settlement of the fees due to Shellbay under the Consultancy Agreement for the period to 30 June 2021. The Fee Shares are issued at an implied price equal to £0.2425 per Fee Share (in aggregate equal to £7,394,360), being the mid-market price of Ordinary Shares of the Company at close of markets on the last day of the relevant period, being 30 June 2021.

As announced in the Results, the fee due to Shellbay for the period to 30 June 2021 was reduced by £821,595 as a gesture of goodwill by Shellbay, being a contribution by Shellbay towards the irrecoverable VAT potentially due on this fee by the Company. Should the Company subsequently become registered for VAT and be successful in reclaiming all or part of the VAT associated with the consulting fee, then Agronomics undertakes to add an ex-gratia amount to the next annual bill from Shellbay, equal to the pro rata part of the waived fee relative to amount of VAT subsequently recovered by the Company.

Transfer of Fee Shares to Galloway Limited and Grant of Options over Fee Shares by Shellbay

Shellbay is a company indirectly wholly owned by Mr James Mellon, a Director of the Company. Immediately on receipt of the Fee Shares, Shellbay has agreed to transfer 11,457,446 Fee Shares directly to Galloway Limited, the 100% owner of Shellbay, and also indirectly wholly owned by Mr Mellon. Mr Denham Eke is also a director of both Galloway and Shellbay.

In accordance with consulting and other incentive agreements agreed by Shellbay it has granted options to acquire, for nil consideration, in aggregate, 15,215,610 Fee Shares (the "Options") to certain of its management and advisory consultants (the "Option Holders"), including an option over 853,781 Fee Shares to Mr Denham Eke, the Finance Director of the Company. One-third of Options vest immediately, with one-third vesting on 30 June 2022 and the final third vesting on 30 June 2023. Up to 25% of the Options are subject to claw-back by Shellbay.

Option Holders have elected to exercise Options, in aggregate, over 3,803,902 Fee Shares, and the transfer of these shares to relevant Option Holders shall occur with immediate effect (of which Mr Eke shall receive 213,445 shares).

Following the transfer of the shares to Mr Mellon, and exercise of Options, Shellbay shall hold, in aggregate, 15,230,856 Ordinary Shares of the Company, of which 11,411,707 shares remain subject to the Options.

Following the transfer of shares to Galloway Limited, the grant of Options, and the exercise of Options, the interests of the Directors in Ordinary Shares is as set out below:

*Jim Mellon is currently interested in a total of 149,145,611 Ordinary Shares. 133,910,950 are held by Galloway Limited and 15,234,661 are held by Shellbay, companies which are both indirectly wholly owned by Jim Mellon, and 1,273,960 Ordinary Shares are held directly by Mr Mellon. Denham Eke is a director of Galloway Limited and Shellbay Investments Limited.

** Richard Reed is currently interested in 6,354,412 Ordinary Shares held by Reepa Limited. Reepa Limited is wholly owned by Richard Reed.

Terms of Shellbay engagement

Shellbay is not paid an annual consultancy fee (whether fixed or relating to the net asset value of the Company's assets) but the Company shall reimburse it for all reasonable and properly documented direct expenses incurred in performing the services (including the direct costs of remunerating employees and/or consultants).

As previously reported, Shellbay is entitled to an annual fee equal to the value of 15% of any increase between the Company's net asset value ("NAV") on a per issued share basis at the start of a reporting period and 30 June ("Closing NAV Date") each year during the term of its engagement, aligning the interests of Shellbay with those of the Company. The opening and closing NAV for each period will be based on the audited financial statements of the Company for the relevant financial year, with the opening NAV for each reporting period being the highest NAV per share reported at a financial year end for the previous reporting periods during the term of the agreement (establishing a rolling high-watermark for Shellbay to qualify for such fee). Any increase in NAV per share will then be applied to the issued share capital at the end of the relevant period for the purposes of determining the 15% fee.

Further details regarding the terms of Shellbay's engagement by the Company are set out in the announcement of the Company dated 6 May 2021.

Related Party Transaction

Mr Jim Mellon and Mr Denham Eke are Directors of the Company. Mr Mellon is indirectly the sole owner of Shellbay. Mr Denham Eke is the sole director of Shellbay.  The appointment of Shellbay as the Company's Advisory Consultant (and the terms of Shellbay's appointment) constituted a related party transaction at the time Shellbay was appointed, but the issue of the Fee Shares to Shellbay in accordance with the terms of Shellbay's advisory agreement is not a related party transaction pursuant to the AIM Rules for Companies (the terms having previously been agreed and determined as being fair and reasonable and in the best interests of all shareholders by the independent directors of the Company).

Admission & Total Voting Rights

Application has been made for the 30,492,206 new Shares to be admitted to trading on AIM ("Admission"), with Admission expected to occur on or around 29 April 2022. The new Shares will rank pari passu with the existing Shares, including the right to receive all dividends and other distributions declared after the date of their issue.

 Following the issue of the Fee Shares, the Company's total issued share capital will comprise 977,946,666 Ordinary Shares, each with voting rights. This figure may be used by shareholders as the denominator for the calculations by which they will determine if they are required to notify their interest in, or a change to their interest in, securities of the Company under the Financial Conduct Authority's Disclosure and Transparency Rules.

This announcement contains inside information for the purposes of Article 7 of the Market Abuse Regulation (EU) No. 596/2014, as it forms part of UK Domestic Law by virtue of the European Union (Withdrawal) Act 2018. Upon the publication of this announcement, this inside information is now considered to be in the public domain.

About Agronomics

Agronomics is a leading listed alternative proteins company with a focus on cellular agriculture and cultivated meat. The Company has established a portfolio of 21 companies at the Pre-Seed to Series C stage in this rapidly advancing sector. It seeks to secure minority stakes in companies owning technologies with defensible intellectual property that offer new ways of producing food and materials with a focus on products historically derived from animals. These technologies are driving a major disruption in agriculture, offering solutions to improve sustainability, as well as addressing human health, animal welfare and environmental damage. This disruption will decouple supply chains from the environment and animals, as well as being fundamental to feeding the world's expanding population. A full list of Agronomics' portfolio companies is available at https://agronomics.im/.

About Cellular Agriculture

Cellular Agriculture is the production of agriculture products directly from cells, as opposed to raising an animal for slaughter, or growing crops. This encompasses cell culture to produce cultivated meat and materials, and fermentation processes that harness a combination of molecular biology, synthetic biology, tissue engineering and biotechnology to massively simplify production methods in a sustainable manner.

Over the coming decades, the source of the world's food supply traditionally derived from conventional agriculture is going to change dramatically. We have already witnessed the first wave of this shift with the consumer adoption of plant-based alternative proteins but today, we are on the cusp of an even bigger wave of change. This is being facilitated by advances in cellular agriculture. This change is necessary, given scientists claims that if we maintain existing animal protein consumption patterns, then we will not meet the Paris Agreement's goal of limiting warming to 1.5℃

AT Kearney, a global consultancy firm, projects that cultivated meat's market share will reach 35% by 2040. This combined with the Good Food Institute's estimate that a US$ 1.8 trillion investment will be required in order to produce just 10% of the world's protein using this technology, means that we are on the cusp of a multi-decade flow of capital to build out manufacturing facilities. Funding in the field of cellular agriculture is accelerating, however still less than US$ 2 billion has been invested worldwide since the industry's inception in 2016.

Contacts

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